Employment and Labor Law

Last May, the Canadian government enacted legislation aiming to assist in the removal of forced labour and child labour from Canadian supply chains. The Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Act”) took effect on January 1, 2024 and applies to organizations and government institutions that meet certain criteria.

Government institutions, bodies and offices that are subject to the Federal Access to Information Act and that produce, distribute or purchase goods, will be subject to the Act.

Likewise, certain entities that produce, distribute and/or sell goods in or outside Canada, or that otherwise import goods produced outside Canada (referred to as “Triggering Activities”) will be subject to the Act (referred to as “Reporting Entities”). More specifically, Reporting Entities include corporations, trusts, partnerships, and other unincorporated organizations that are either (i) listed on a stock exchange in Canada or (ii) undertake any Triggering Activity and meet the following conditions:

1. the organization has a place of business in Canada, does business in Canada or has assets in Canada (the Act does not provide any guidance in this regard and the criteria applied by the Canada Revenue Agency may therefore be useful in determining whether an organization has a presence in Canada for the purposes of the Act); and
2. the organization must meet two or more of the following conditions for at least one of its two most recent financial years:
   
   1. the organization must have at least $20M in assets
   2. the organization must have generated at least $40M in revenue, and/or
   3. the organization must employ an average of at least 250 employees.

Consolidated financial statements are used to make the determinations in items 2 a. and 2 b. above.

Moreover, an entity that controls a Reporting Entity will also be considered to be a Reporting Entity for the purposes of the Act.

The Act introduces a reporting regime requiring a Reporting Entity to submit an annual report to the Minister of Public Safety outlining what steps it has taken over the course of the previous financial year to prevent and reduce the risk that the goods that it produces, distributes or sells, or goods produced outside of Canada that it imports, involve the use of forced labour or child labour. The first such report is due on or before May 31, 2024.

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